Plot Loan India –
In the Indian context investing in buying land or plot hold on age-old and trusted investment. The ideology of buying land and building a house still holds prominence in our nation. But as easy it may appear, buying land is a daunting task if you are new to it. Buying a plot is a costly affair, so most of the people tend to take a loan for the same.
Similar to home loans and other loans there are a series of paperwork that one needs to complete before availing the plot loan. So here is the complete list highlighting about plot loans, its eligibility criteria, and documents. It will help you understand in-depth about plot loans and requirements around it so that you can easily get a loan to buy plot/land.
What is a Plot Loan?
They are also popularly known as a land loan. These loans are unique banking product designed to facilitate the purchase of land or plot. One must not get confused between plot loan and land loan as these two are entirely different aspects of loans. Although, you may find similarities in the documents and eligibility criteria the interest rate and other aspects of plot loan are different from a home loan.
When judged on the parameters or ease of availing the loan, the home loans are easy to avail as compared to the plot loans. The primary reason behind this is that land loan is not only about the purchase of land but also the subsequent development of the property. Plot/Land loans come at a higher risk as compared to a home loan. The moneylender requires security about the ROI. Thus, if one wishes to increase their chances of obtaining the plot loan, it is beneficial to assure the return on the purchased property.
The undeveloped property is a risk for the lender. Thus, they trust more on developed properties. For example, if one wishes to get plot loan for farming purpose, then the probability of obtaining the loan is higher as compared to getting a loan for property which does not have any substantial plan on its development in future.
Leading Banks providing Plot/Land Loans-
As already mentioned, people often opt for plot or land loan for buying land. Some banks and NBFCs can give you plot loan. However, you need to compare their rate of interest processing fees, check your CIBIL score, etc., before applying for the same. Here is the list of banks that you can have on your radar if you wish to get a plot/land loan:
- ICICI Bank
- Punjab National Bank or PNB
- State Bank of India
- Axis Bank
- HDFC Bank
- Federal Bank etc.
Features of Plot / Land Loans –
- Location & Type of Property: You have home loans for various purpose, but when it comes to land/plot loan it can only be availed for buying a residential plot. An important point to note about plot/plan loan is that the land must be present within the limits of the respective municipality.
- Loan to Value Ratio (LTV): It is the amount of loan you can get against a property. The LTV for a home loan can range between 80%-85%, but for the plot loan, it can be up to 70% of the plot value.
- Tax Benefits: Well, if you have thought that the plot loan will not give you any tax benefit, then the good news is that it does give you some rebate, only if you wish to construct a house on the land. The tax deduction will only apply to the construction amount of the loan and after the completion of the construction.
- Tenure: Plot/land loans are of shorter duration as compared to the home loans. The tenure of plot loan an stretch up to 15-20 years.
- Loan Amount Limit: There is an upper to the plot loans offered by the bank. Different banks may have a different upper limit so make sure that you run through the policy papers and other documents before applying for plot loan.
- Clauses Included: There is a catch in the plot loan. For example, if you get the loan, you would be required to start the construction work on it within a specified period. It is mentioned in your loan document, so make sure that you run through the paper to get more clarity on it.
- Prepayment Charges: There is a possibility that the bank may charge a prepayment penalty.
- Interest Rates: Similar to other loans, the interest rate for plot loan may vary from bank to bank. Although the range remains the same, the exact percentage may vary. Make sure that you do a thorough study by comparing the interest rates offered by different banks so that you get the best one by your side.
- Down Payment: When we talk about downpayment then for plot loans, it may be higher because the LTV for plot loan is only 70% as compared to home loans which shoot up to 85 %.
- Higher interest rates for NRI: NRIs constitute a major segment of people who invest in land. But, it’s not necessary that all bank may provide them the loan. Some banks do provide a loan to the NRIs, but that comes at a higher interest rate.
Eligibility for Plot loan –
The eligibility for land/plot loan is very similar to a home loan. Here is what makes you eligible for plot loan :
- You must be the resident of India
- Your age must be above 21 years
- Good CIBIL score (it may vary from bank to bank)
- If you are a salaried individual, then you must satisfy the income criteria as specified by the bank.
- In case you are self-employed with the bank where you have applied for a loan then you must be employed by the bank for a specified period to become eligible for plot loan.
Documents for Plot loan –
Here we have listed the documents that you are required to submit when you apply for plot loan:
- Filled the application form
- Photograph of the applicant
- ID proof- Adhaar card, passport, voter card, driving license, etc.
- Residence proof- like electricity bill, phone bill
- Bank statement of last six months
- Form 16
- Identity and address proofs
- If you are a salaried person, then you need to submit the copies of your salary slip as income proof.
- Last six months bank statement reflecting credited salary
- In case of a self-employed individual, you must submit last three years’ IT return along with sales receipt to show your income proof.
- The borrower may also be required to submit site ownership documents in the sellers’ name. It includes the following documents :
- Original ownership document of the land
- ‘No Encumbrance’ Certificate for the plot
- Plot layouts which are duly approved by the Town Planning Authority
- Land records
- Revenue receipts
- Tax receipts for taxes paid by the landowner
What do you need to know about Plot Loan Interest Rates?
Similar to a home loan, the plot loans also come with certain interest rates. This interest rate may vary from one bank to another. Thus, it’s advisable that you must check the interest rate before applying for plot loan. Another important factor that you must take into consideration is the type of interest rate, where it’s floating or fixed. The interest rates play a key role in impacting the EMIs. Thus, it is the first thing that you must take into account the moment you start applying for plot/land loan. You can also use the plot loan EMI calculator which will help you find out the EMIs and based on it you can figure out the bank from where you would like to take the loan or decide the amount of loan.
Plot Loans Interest Rate –
When it comes to the interest rates offered by the bank, then it ranges from 9.95%-12% percent. It may be floating or fixed; you must inquire with your desired bank about the same. Another important point to note about plot loan is that the NRIs get the plot loan at a slightly higher interest rate as compared to the Indian residents.
Snapshot at some of the leading plot/land loan provider and their key features –
Many banks and NBFCs can provide you with the plot. Although there are many other banks in the league here, we have shortlisted the popular ones.
|Bank Name||Rate of Interest||Processing Fee||Loan Amount||Tenure|
|SBI||Floating – 8.30% – 8.65%||₹2,000 to ₹10,000 + applicable tax||upto 50 cr.||1-30 years|
|HDFC||8.45% – 8.70%Floating||Up to 0.5% (max. ₹11,800)One time fee||5L – 10Crs||1-30 years|
|ICICI||8.50% – 8.85%Floating||0.5% (max. ₹11,800)One time fee||5L – 10Crs||3-30 years|
|Axis||8.35% – 11.75%Fixed/Floating||0.50% (min. ₹10,000)One time fee||5L – 10Crs||1-30 years|
|DBS||8.5% – 8.5%Floating||₹ 10000+ taxesOne time fee||50L – 5Crs||1-25 years|
|PNBHFL||8.40% – 10.20%Fixed/Floating||Up to 0.50% (min. ₹10,000 + GST)One time fee||8L Min||1-30 years|
|CANARA BANK||8.35% – 8.55%Floating||1,500 to ₹10,000||30 years|
|DHFL||9% – 9.75%||5,000 to ₹20,000One time fee||1L – 5Crs||1-30 years|
The list of banks doesn’t end here; you may choose from the number of other banks and NBFCs. But, it’s always good to compare the interest rate of various banks so that you may find the right bank to support your dream of buying a plot.
HDFC Plot Loan
|Eligibility||Individually or Jointly|
|Tenure of Plot Loan||Maximum 15 years|
|Maximum Loan amount||If it is up to 20 lac, you will get funding which is 90% of the cost of property, If it is Rs.20.01 lakh – Rs.75 lakh then you will get funding which is 80% of the cost of property, for the amount above 75 lac, HDFC funding is 75% of the cost of property|
|Documents Required||You need to submit the following documents :
SBI PLOT LOAN
|Eligibility||You must be an Indian national and above 21 years of age. The borrower must also have records f repaying the loan for at least two years.|
|Tenure of Plot Loan||Maximum 9 – 10 years..|
|Loan amount||The loan amount is based on the cost of the plot. The bank offers loan which is up to 85% of the cost of the plot.|
ICICI PLOT LOAN
|Eligibility||The applicant must be a resident of India and 21 years of age. An individual can be salaried or self-employed|
|Tenure of Plot Loan||3-30 Years|
|Loan amount||5L – 10Crs|
Plot Loans Through Loanyantra.com –
Loanyantra is a great way to help you find the right loan provider. Apart from finding the right lender and helping you find out the most cost-effective way to buy land, we also help you with the complete paperwork so that there is no hurdle in the process of loan application and approval. Based on your requirement, we also provide you the complete information about the current interest rate so that you can get the complete insight into it. To know more about our company and services you can contact us today. Remember, Loanyantra is a complete one-stop solution when it comes home loans, plot loans, paperwork, etc.
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